In a major setback to the automobile industry, private car makers like Maruti, Mahindra, Tata and Honda has shut down production due to liquidity crunch, slow job growth and weak buyer sentiment.
The entire country including the Northeast is having a severe crunch in two-wheeler and four-wheeler buyers over the past one year.
According to reports that quoted the latest census, at the beginning of June this year, there are around half a million passenger vehicles worth Rs 35,000 crores lying unsold in company dealers.
In the two wheeler segment, this figure stands at three million units valued at Rs 17,000 crores.
So in order to tide over the crisis, the two-wheeler and four wheeler makers in the country are forced to shut plants for certain period of time.
These shut downs started in the month of May itself with Maruti Suzuki, Mahindra and Tata Motors suspending production during last month.
The report further added that the shutdown has reduced industry output by 20 to 25 per cent during the May-June period putting pressure on company stockyards and dealerships.
The dealers had to contend with rising inventory as much as 50 per cent over normal while they also have to pay GST on unsold stocks putting them under severe financial constraint, the report added.